State Auditor Rebukes St. Louis City Agencies for Shoddy Record-keeping, No-Bid Contracts

State auditor Susan Montee scolded two city agencies in financial audits released yesterday.

The audit of the city's Community Development Agency (CDA), responsible for administering federal housing funds and managing vacant properties, cited the department for failing to advertise proposals or document the selection process for $4.3 million in funds for housing projects in north St. Louis. According to the audit:

The projects funded by this program are proposed and selected by the 12 members of the African American Aldermanic Caucus; however, there are no meeting minutes or other documentation of the reasons for selecting projects to be funded.

The same audit reports that the CDA's Land Reutilization Authority, a.k.a. LRA, does a poor job of accounting for the 9,300 vacant buildings and lots owned by the city, with many properties listed twice on the LRA database. Auditors also found that the LRA short-changed the city's Forestry Division more than $1.5 million last year for upkeep of those vacant properties.

The LRA does not have contracts related to costs incurred
for property maintenance and upkeep. During the year ended June 30,
2008, the LRA paid approximately $660,000 to the St. Louis Development
Corporation for property upkeep services, and $100,000 to the city's
Forestry Division for grass cutting, weed maintenance, and debris
removal. In addition, there is no documentation to support why only
$100,000 was paid while the Forestry Division's billing records
indicate it incurred charges of $1,658,000 for LRA properties. LRA
staff indicated the land sales do not generate sufficient revenues to
pay for all related costs and the city's General Fund incurs the
majority of the additional costs.

An audit of the city's Information Technology Services Agency (ITSA) was just as harsh. Auditors cited the ITSA, which manages the city's IT functions, for failing to properly bid a contract that paid consultant United Forensics more than $1 million over several years.

The ITSA did not retain adequate documentation regarding the award of the United Forensics consulting contract in 2005 as required by city rules and regulations. In addition, the exact value of the approved contract amount was not clear...The ITSA and the city approved annual contract extensions with United Forensics that significantly increased the total value of the contract and the hourly rates to be paid by the city; however, these contract extensions were approved without considering proposals from other vendors.

The former head of the ITSA, Mike Wise, resigned last fall after it was revealed that he got his son an internship with United Forensics during the time the firm worked for the city.